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High living costs and eroding traditions: London stalling?

High living costs and eroding traditions: London stalling?
There is a tendency in the UK to talk about London as though it were the only place fit to do business, and with a rich maritime history, the Baltic Exchange and the headquarters of the IMO on its side, shipping is no exception.

But paying people to work in London has become seriously expensive. The UK's Land Registry places average London house prices at £500,000, more than double the England and Wales national average of £186,553, and commuters do not get away with much either, with the most expensive train fares in Europe snatching a sizeable chunk of their wages.

Last year, Lloyd’s Register (LR), one of the world’s biggest classification societies, firmly grounded in London maritime tradition, nevertheless uprooted 400 staff to relocate to Southampton, on the south coast of the UK. “Down here we’re able to give our staff a decent quality of life, and the commute to work is considerably easier,” explains LR spokesman Nick Brown. “One of the big opportunities was to transform the way its people work. There are no individual offices for anyone and no allocated desks - the intention is that colleagues are able to break down barriers and prevent silos forming across the business.”

The classification society has formed ties with the University of Southampton, which has a strong maritime heritage and bent. The result is a symbiotic relationship, which gives students the chance to benefit from LR’s in-the-field expertise while giving LR the chance to benefit from the university’s pool of fresh, innovative talent and ideas.

Faststream Recruitment, a global recruiter for the maritime sector, has operated from Southampton for 16 years. “It’s interesting,” says ceo Mark Charman. “Increasingly organisations are looking carefully at the cost of running their businesses, and finding that other locations offer much of the upside of London but without the cost of being there in the first place. For many organisations it’s not just about cost but it’s about quality of life for their employees.”

Far from a fledgling maritime hub, as this writer had suspected, Charman argues that it is already very much in full swing. “There’s already a big cluster here, and it’s growing,” he says. “One of the advantages of being here in Southampton is that there is a big skill-pool of people which companies can tap into.

"Southampton’s a good place for people to work and live without the costs of London,” says Charman. “We’ve got good communication links across the south coast, we’ve seen more and more recruitment being done down here for organisations that want to grow their base. It’s the busiest cruise port in Europe; we’ve got LR down here now, we’ve got the Martime and Coastguard Agency; we’ve there’s lots of expertise from the naval side; and a whole cluster of small and medium-sized companies that support the cruise industry and shipping.

“I can’t name them, but I’ve been speaking with a large international shipping organisation that has been doing a study looking at Southampton and comparing the cost with other global hubs, and considering Southampton as a new global headquarters - what their decision will be I don’t know, but Southampton was very favourable.”

With London’s sky-high living costs tapering off dramatically, even for cities like Southampton less than 100 miles away - or an hour by train - could these high barriers to entry cause an exodus of expertise away from London?

What about the stigma associated with being outside London? “There may have been in the past but those barriers have reduced over the years, and I think LR is a really good example of that, as an example of a global market leader who have said ‘hey, we don’t need to be in London, we can be down in Southampton and it’ll work better for us.’ I think other organisations will see that and some will follow suit," Charman adds.